Why ExxonMobil Stock Dropped 5% Within the First Hour of Trading Today
Shares of integrated energy giant ExxonMobil Corporation (NYSE: XOM) fell as much as 5% within the first hour of trading today. That's a notable move for the company, which is highly diversified across the oil and natural gas sector and normally doesn't see the kind of big stock price swings to which smaller players in the industry are often prone. Making it even more interesting is the fact that oil prices were mixed in early trading, so not really a factor in the negative sentiment here. Indeed, it was all about earnings.
Before the market opened, Exxon reported a loss of $0.14 a share, driven by a $0.67-per-share charge (writing down the value of assets because of low energy prices). Pulling out that one-time item, the company earned $0.53 per share. However, the bigger number here was likely cash flow, which came in at around $6.3 billion. The problem is that the energy giant pushed $7.1 billion out the door to fund its capital spending plans in the quarter. Add in $3.7 billion in dividends paid and it's easy to see that Exxon didn't even come close to covering its dividend with cash flow in the first quarter. It wasn't exactly expected to, but the size of the shortfall is sobering.
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Source Fool.com
